How many banks do you use for your property loans?

How many banks do you use for your property loans

  • 1

    Votes: 37 36.3%
  • 2

    Votes: 34 33.3%
  • 3

    Votes: 8 7.8%
  • 4

    Votes: 13 12.7%
  • 5

    Votes: 2 2.0%
  • 6

    Votes: 3 2.9%
  • 7

    Votes: 0 0.0%
  • 8

    Votes: 1 1.0%
  • 9

    Votes: 0 0.0%
  • 10+

    Votes: 4 3.9%

  • Total voters
    102
  • Poll closed .
I call your bluff sir.
I'm with him ↑
If the situation ever arose, that you lose none of your money is fantasy.
And given from your postings that at least some of your IP's are fairly CF-, then even if the sale price breaks even you've lost your own money.

I've often posted (& boasted) about dealing & negotiating with banks over the years, but unless I've got something to put on the table there's no point even wasting 40c for the phone call.
I you think your not giving it to them, I'd say your deluded.
 
I'm with him ↑
If the situation ever arose, that you lose none of your money is fantasy.
And given from your postings that at least some of your IP's are fairly CF-, then even if the sale price breaks even you've lost your own money.

I've often posted (& boasted) about dealing & negotiating with banks over the years, but unless I've got something to put on the table there's no point even wasting 40c for the phone call.
I you think your not giving it to them, I'd say your deluded.

There is "Bigtone" and there is "Big Tone" (notice avatar) I am trying to work out how to change my username to avoid the confusion.

My understanding of what my namesake is saying is that all the assets he puts up are funded by the lenders so they are in effect theirs anyway.

In my investment journey there was a time I had put in no money of my own to buy the properties or service the debt so in effect it was all their money anyway and if they took it back nothing that was originally mine would become there's. However I do service 95% of the shortfall myself these days so it would certainly be a different case now as I have plenty my own $$$ invested.

Cheers

Bigtone
 
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Nathan is right, keep your loans separate. It's a little harder and certainly not as convenient but it's in your best interests this way as opposed to the banks interests.
 
.....hah.....

you'd be a rare breed indeed if that were the case Big Tone.

I was under the impression all mortgage contracts were written by the Banks fairly senior solicitors, and any miniscule changes thereto needed sign off by a full review team.

I've managed to get 2 changes through in the past 15 years. One was a hollow victory, cos whilst I argued successfully to remove the "all monies" clause, the interest rate went up 0.78%. Bad call.

I've never been able to budge them on security.



I'm willing to bet, given my experiences, that this is wholly untrue. If you offer no security and are able to change the standard (and there are hundreds) of mechanisms for the banks protection.....I would be utterly shocked.

I call your bluff sir.

Let me clarify...................

The first two admittedly, (when I did not know any better) I did have to give the lenders everything, even the 'family jewels'. Thanks to Father Time and King Equity I do not need to that any more. I am surprised to hear that such respected and intelligent persons on this forum are, with from what I can gather from the interesting and informative posts, still putting their nuts on the line.

may be I am investing at the 'rats and the mice' level and I do not need need such large sums of money?

I am not sure, but my interpretation of building wealth was to utilise 'leverage' and minimise risk to create as much wealth as soon as possible and there are a myriad of methods to doing this with out having to pull any money out of your own wallet.

I thought this was a given in investment practices?

Call my bluff, if you think that will increase your notoriety on this forum then Bravo, but your SIR do not know everything. May be I am just not on your playing field, for I am just a lowly resi prop (read sandpit) investor. What would I know.

Big Tone
 
I'm with him ↑
If the situation ever arose, that you lose none of your money is fantasy.
And given from your postings that at least some of your IP's are fairly CF-, then even if the sale price breaks even you've lost your own money.

I've often posted (& boasted) about dealing & negotiating with banks over the years, but unless I've got something to put on the table there's no point even wasting 40c for the phone call.
I you think your not giving it to them, I'd say your deluded.

PB

How do you fund your investment purchases?

BT
 
There is "Bigtone" and there is "Big Tone" (notice avatar) I am trying to work out how to change my username to avoid the confusion.

Just to quickly interject; I'm led to believe that a name change is easily arranged by sending Sim' a PM or email.
 
PB
How do you fund your investment purchases?
BT
The old fashion way:
I have X and want to buy XXXXX, and ask the bank "do you want my biz?"

I think what your saying is like "playing with the houses money", but in RE unless your total LVR is very conservative, then it could be tricky.

It also seems like your saying "if one IP becomes unrentable for a long period, or interest rates go to 12%, you just don't pay the loan and let the bank take it over".
This situation will also cost you a considerable amount as well.
So would you really just let it go like that?
My guess is no, and the resulting situation is the same as being x-colled.
If your total LVR is = or > 90% your up **** creek yanking your paddle however your loans are organised.
Then there's CIP, where you risk getting a margin call on the basis that values have decreased regardless of income.
I've posted before, defaulting on a loan is almost economic suicide and puts all other assets at risk, with collaterisation making no difference.
 
All mine with one lender and its starting to get a bit sticky...

Still trying to finalise my finance for the Mona Vale build. Had pre-approval a year ago on a resi rate to mid 80's LVR. Now they're talking a Commercial 8.69% rate to a max 60% lend. At 60% lend that means only $1.1M for my $1.26M contract so I'll have to tip in another $160K in cash. I can do that but they're raiding my closet.

Imagine a bank demanding a 60% LVR and an 8.69% rate for me to add two premium resi properties to my portfolio and considerably improve my servicability picture. Its loony days, that's for sure. At least their vals came in where mine were so there's now a heap of fat left in this lend at completion. I'll do a resi re-fi at completion and get it back to my resi rate and an LOC in place to lift the LVR and give me a war chest to go shopping again.

But first I've got to get the backroom boys across the line at 60%. They want 150% interest cover after discounting my rents by 25% and allowing mucho mega personal "consumption" numbers well beyond what we actually spend. That 150% interest cover servicability is the sticking point. Even though these three units will rent for $875/$875/$1000 each at completion. 150% is just huge. Doesn't matter that the whole thing is cash flow positive and 60% LVR, they want mega cash flow positive...

Cheers,
Michael
 
backroom boys across the line at 60%. They want 150% interest cover after discounting my rents by 25%

That sounds familiar Michael.


That 150% interest cover servicability is the sticking point.

Yes, it is hard to get over....it dictates what types of property you can actually buy.

150% is just huge. Doesn't matter that the whole thing is cash flow positive and 60% LVR, they want mega cash flow positive...

150% is lowest I've heard. Some are at 175%, and one clown of a Bank wants 200% as a minimum.


All in thename of having your posterior out in the wind where it can get shot off, and theres is nice and warm and cosy inside.


As an observation Michael, you've been talking about this Mona Vale development for over 4 years now, and it appears it will be a few more years yet til the thing is complete. I question whether developing from scratch is the best strategy for creating wealth.....or do you think your years, probably 4 or 5 all up would have been better spent just purchasing property undervalued - certainly the opportunity to buy under replacement costs are out there.


Have you researched that, or are you now too far in ??
 
Dazz,

Don't worry, I hear you loud and clear. There's a nice big margin in this for me, but the effort to realise it is enormous. Not sure I'll do this ground up full construction thing again. I might look at easier value add opportunities like simple renos or splitter blocks or duplexes. But when you go multi-unit in Sydney's premium blue chip suburbs with NIMBY loving councils you're up against it. All good learning, but still about $700K odd in margin in it so probably worth the effort.

It will probably get the finance green light this week and then will be 12 months until completion. Builder is good to go and the demolition is all lined up. It has taken longer than planned, but we did consciously sit on the fence for about 12 months through the bottom of the GFC to make sure we were building into a rising market.

All good, glad I did it as I've learnt and grown a bundle as well as made a nice little profit to my portfolio at completion. Will I do it again? Probably not something this complex. Going to go for easier conquests for a bit.

Cheers,
Michael
 
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